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Chinese Ghost Towns? Get Ready to Feel Good About Being American Again

Last updated by on 19 Comments

There’s been this fear in recent years that the U.S. government is a completely mismanaged mess. To some extent, that fear is warranted. After all:

– Our budget deficit is over a trillion dollars.
– Our total debt is over $14 trillion dollars.
– Our political leaders would rather hold the line than look for real solutions.
– Our GDP growth is smaller than hoped for coming out of the recession, at 2%.

…we do have some very real problems.

As we’ve struggled there’s been a lot of mention about China’s economic vitality. China’s GDP growth has hovered around 10% for many years and sits at 9.1% in the latest data release. There is talk about all of the debt and how the Chinese should be seen as a real threat to surpass the U.S. as the world’s economic leader.

And that’s why the following video on ‘Chinese Ghost Towns’ so intriguing. It was from an Australian news outfit, SBS Dateline. You can find the rest of the story and aerial photos here.

It’s a little over 14 minutes long, but I think you’ll find it well worth the time.

It appears that a great deal of China’s economic growth has been through the strategy of the government building massive cities and universities that there is no demand for. All of the materials and labor that goes into these massive projects improves GDP. Unfortunately, its led to an estimated 64 million empty apartment units in China that are too expensive for most Chinese families to afford (there is only a little over 30 million multi-unit housing units in the U.S.). Occupancy rates in these new cities are at less than 25%. And the ‘world’s largest shopping mall’ is almost completely empty.

There is even an aerial photo of the Yunan University – built to accommodate 2.3 million students. How many students actually attend? 11,000.

All of this could ultimately result in a few little problems for China:

  • Massive government debt to build and maintain all of this when there is no demand for it and then eventually tear a lot of it down.
  • A housing bubble that will be so big it could potentially bring down the entire economy.
  • Civil unrest for the wastefulness of taxpayer dollars to create housing that nobody can afford.
  • Complete degradation of an already poor environment and habitat.

If this is what it takes to maintain economic growth… then China has some big problems. You get the feeling when watching this eery video that China’s government is completely mismanaged and it’s only a matter of time before that house of cards comes crashing down.


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I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You can also explore every post I have written, in order.

  • I think it worries me even more than economic problems for China could lead to more problems for the US…after all they hold a ton of our debt, and if they ever needed to call it up we could have some major issues.

    • G.E. Miller says:

      True. Maybe I should have titled the post “You think we had a housing crisis, wait til you see this”. China imploding is probably not a good thing for the U.S.

    • You bring up an excellent point Justin, because when China does collapse they will start cashing in their investments. I could see the US and European governments working out a deal to give aid to China rather than pay back the US debt immediately (a sort of a robbing Peter to pay Paul sort of scenario)…just to keep things from collapsing (or slowing the collapse) for the rest of the world.

  • phil says:

    The thing about the US debt to China that doesn’t worry me is the fact that the debt is in US dollars. If it were in some other country’s currency it would be cause for a concern, but if China really wanted to collect on our debt, all we have to do is increase the money supply and give them what we owe. The US dollar would be deflated, but guess what? that means american products are cheaper to the world market, so we start exporting things again. China will never call us on our debt because it would destroy their economy more than it would destory ours.

  • James says:

    This has happened since the 90’s in China.
    Don’t act like Columbus, it’s just how they boost GDP.
    No biggy.

  • James says:

    BTW, So called “Massive government debt”, the Chinese’s government’s debts are less than 90% of their GDP, I don’t think it is consider “massive”.

    • G.E. Miller says:

      When GDP is driven by debt to keep it elevated, that’s a dangerous situation. You can only build so many gigantic cities before completely crushing your housing market and then having to police, maintain, and then demolish them all.

  • Vole says:

    “Feel Good About Being American Again” – I wasn’t American in the first place.

  • Ahmed says:

    maybe they know something’s about to go down and they’re building to house those people when they come back

  • Betty Rubble says:

    I’ve been telling/warning people for a while now that China is a house of cards…they will crash and when they do they will crash hard. You’re right of course in that this will affect the rest of the world but I don’t know that there’s a lot to be done about it at this point. Hopefully the US and Europe can get their house back in order but that seems rather doubtful since they just keep patching the problems rather than trying to find viable long term strategies. Economics is an inexact science and the economists/politicians thus far have made a mess of things worldwide.

  • Tyler says:

    China truly is a house of cards. All of their wealth is concentrated on the coast. As of 2008, over half the country still lived under in international poverty rate (less than $2 US per/day). Some of these manufactured cities may be failed attempts to “spread the wealth” to the inland areas. As for fears of them calling US debt, one of the major employers in these poor inland areas are US companies. As a very distinguished demography professor put it “if China calls on US debt and hurts our economy, your sock labels will start saying ‘made in Thailand,’ and millions of Chinese workers will lose their jobs in an area that lacks the infrastructure to supply new employment options. In short, at least for the next couple decades, we have China by the bal!!s”

    The one child policy in major cities has also led to an unbalanced population and exacerbates the problem of inequality. Birthrates for the better-educated city dwellers are well under replacement, while birthrates for the less educated, poor rural families are still well above replacement. Given that China’s social structure is not as economically mobile as the west, this is a recipe for disaster. It will result in a large population of poor citizens without the education to move up in the social ladder, and a decreasing number of highly educated metropolitans who can conduct international business. While these building projects may have been an attempt to provide education and metropolitanism for rural China, the social culture has not caught up.

  • Ron Ablang says:

    This is incredible that someone would build these new towns out in the middle of nowhere. It would be cool to see a map of where all the ghost towns are located along w/ population data for each.


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